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In a legislative session loaded with bad policy ideas, Sen. Paul Bettencourt’s revenue caps bill is among the worst.
Senate Bill 2 would further limit the amount of revenue local governments could raise as property values increase. Under existing law, cities and counties can increase revenue by as much as 8 percent without inviting a rollback election. The Senate bill would reduce that amount to 4 percent.
The liberal Center for Public Policy Priorities announced its opposition to the legislation in a recent report that stated, “This proposed interference by the state in local control over taxes and spending would violate the basic democratic principle described by Thomas Jefferson — ‘That government is best which is closest to the people.’”
Texas cities and counties already have voiced opposition to the plan, which would damage their ability to provide services and limit flexibility in making decisions for their communities.
Local services are increasingly important in an atmosphere tainted by the state’s failure to provide basic needs.
For example, Texas’ shortsighted approach to early childhood education resulted in a decision by San Antonio voters to use city sales taxes to fund the Pre-K 4 SA program.
And in November, voters in the San Antonio Independent School District chose to increase their school property taxes to the highest level possible because they can’t count on the state to do its part to improve their schools.
The state is constitutionally required to provide public education. While the Texas Supreme Court ruled last year that the state is meeting the minimum requirement, it also noted that Texas’ school finance system is a mess.
And while the stated goal of SB 2 — reducing Texans’ property tax burden — may sound admirable, the Legislature bears the largest part of the blame for high property taxes.
As the CPPP report on SB 2 noted, “It is important to remember that more than half of local property taxes go to school districts, which SB 2 would not affect. And there is a much better way for the state to reduce school property taxes — increase state aid to public education so that our schools are not forced to raise tax rates just to cover inflation, reduce class size, and attract and retain the best teachers.”
About 55 percent of property taxes are school taxes, while cities and counties account for about 16 percent each, the CPPP report showed.
The situation is particularly outrageous in light of the fact that Texas’ Robin Hood school finance plan — originally an equalization plan — has evolved into a scheme to help shoulder more of the state’s education responsibilities. In other words, the state’s education spending portion has decreased as lawmakers use local property taxes to fill the gap.
A recent Texas Tribune analysis put it this way: “As the state’s share of public education spending goes down, the need for higher property taxes and larger recapture payments goes up.”
School finance is a huge problem that lawmakers need to address this session, but it is stunning that lawmakers hypocritically want to clip local government use of property taxes when the state’s own approach is abusive.
In addition to the loss of local control, the Texas Association of Counties argues that the revenue cap legislation damages local government in other ways. An association position paper states that lower caps “do not address uncontrollable costs that affect counties, such as unfunded mandates, emergencies and demand for services caused by rapid population growth.”
County officials also say the lower caps would lead to lower bond ratings that cost taxpayers more in interest rates.
If state government were more attentive and adequately provided needed services, SB 2 would be less offensive. But Texas is a low services state.
Additionally, the officials responsible for local government services, local taxes and local revenue are elected by voters in their communities.
Legislators should back off and let those local officials and voters handle their own business.
bwdavidson75@gmail.com
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